Asian markets accelerates on G-20 fuel

Sensex, Shanghai, Sydney stretch gains while Nikkei, Hang Seng follows them

Stock market in Asian region rose on Monday, 7 September 2009, after US data showed a slowdown in layoffs, while Chinese shares extended gains on hopes that Beijing will pull out more policy tools as needed to support its volatile stock market. Investors were also cheered after G20 finance ministers and central bankers agreed to keep economic stimulus measures in place for longer.

G20 statement after the meeting over the weekend said that it's not the timing to remove economic stimulus yet even though the global economy looks brighter than it was at last meeting in April. They would work together with IMF and Financial Stability Board to develop cooperative and coordinated exit strategies even though the timing of the policy reversals may vary.

On Wall Street, stocks recorded an up day in a down week Friday with a bit of help from short covering after the government reported slowing job losses. The Dow Jones Industrial Average was up 96.66 points, or 1%, at 9441.27, while the S&P 500 edged up 13.16 points, or 1.3%, to 1016.40. The Nasdaq Composite advanced 35.58 points, or 1.8%, to 2018.78. But that wasn't enough to bring stocks positive for the week. Hurt by a sharp sell off on Tuesday, the Dow lost 1%, the S&P 500 gave up 1.2%, and the Nasdaq shed 0.5% in the five-day session.

On the economic front, US unemployment rate rose to 9.7% but the level of job cuts came in at 216,000 - the lowest in a year.

In the commodity market, crude oil traded near $68 a barrel on speculation OPEC will maintain curbs on output as supplies stay ample at the end of the U.S. peak summer demand season.

Crude oil for October delivery traded at $68.16 a barrel, up 14 cents, in after-hours electronic trading on the New York Mercantile Exchange at 2:49 p.m. Singapore time. The contract earlier fell as much as 48 cents, or 0.7 percent, to $67.54.

Brent crude oil for October settlement traded at $67.14 a barrel, up 32 cents, or 0.5 percent, on the London-based ICE Futures Europe exchange at 2:44 p.m. Singapore time.

Gold dropped, snapping a four-day advance, as some investors sold holdings after bullion surged close to the highest this year. Gold for immediate delivery fell as much as 0.3% to $991.28 an ounce before trading at $994.25 at 3 p.m. Singapore time.

In the currency market, riding on strength in Asian stock markets, currencies rally across the board as the week starts. AUD/USD and NZD/USD are both staying firm above August high and are extending rally in early European session. European majors are generally higher against the greenback but remain in range so far.

The Japanese yen soften against major currencies. The Japanese yen was quoted at 93.16 against the US dollar against Friday’s close of 92.91 yen in New York.

The Hong Kong dollar was trading at HK$ 7.7505 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trade, the Australian dollar ended the local session at its highest level in more than a year as investors sought high-yielding assets such as commodity-driven currencies after improving jobs reports.

At 1700 AEST, the local close, the Australian dollar was trading at 85.16/20 US cents, up 1.3% from Friday's close of 8408/10. It rose further to 85.56 US cents in recent trading.

In Wellington trade, the New Zealand dollar launched yet another assault on the US69c level and once again fell just short. In the past two weeks the kiwi has pushed above US68.90c several times without being able to go much higher. It did so again early on Saturday, and even pushed up briefly just before 8am today. By 8am the NZ dollar was buying US68.86c, from around US68c at 5pm Friday, having climbed from a two-week low near US66.80c early Thursday.

The South Korea won closed at 1,233.5 won to the greenback, up 8 won from Friday's close, as offshore investors continued to buy local stocks.

The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.8510, 0.0540 higher from Friday’s close of NT$32.9050.

Coming back in equities, a flurry of merger-and-acquisition activity took the spotlight in Asian markets, with Toshiba Corporation, China Unicom Ltd. and other major names all chalking up gains from news of fresh deals

In Japan, shares market surged, snapping three days of loosing streak, boosted by gains on Wall Street after the US economy shed fewer jobs than expected and gains in other key Asian markets supporting buying. Investors buying back Tokyo shares on hopes 4% plunge in both the Nikkei and Topix since hitting an 11-month on high on 26 August 2009 makes stock valuation attractive.

At the closing bell, the Nikkei 225 Stock Average index gained 133.83 points, or 1.31% from Thursday to 10,320.94, meanwhile the broader Topix was up 8.86 points, or 0.95%, to 944.60.

On the economic front, the Finance Ministry said that Japan’s foreign exchange reserves at the end of August increased $19.68 billion from a month earlier to a record $1,042.34 billion, largely due to a rise in its holdings of special drawing rights at the International Monetary Fund.

In Mainland China, share market spurted endured gains for fifth consecutive day following gains on Wall Street on Friday and as the Group of 20 nations agreed on steps to shore up the global financial system. Financials and properties spurted on hopes that Beijing will continue to use policy to support asset prices. Bank and insurance stocks surged after reports that the State Council issued guidelines to develop pension insurance in pilot rural areas. The pharmaceutical sector advanced after the Chinese government ordered 7.3 million doses of vaccines for the H1N1 flu.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange rose by 19.51 points, or 0.68% to 2,881.12.

In Hong Kong, benchmark index surged, benefited from strong performance by major heavyweights on tracking cues from Mainland China and firmer Wall Street Friday. Banks and properties outperformed after Beijing released a series of measures to boost market sentiment and on speculation property market investment in China will accelerate after China’s central bank raised the amount foreign funds to invest in equities by 25%. Materials, industrials, and gold miners soared up after a base and precious metal bounced overnight. Coal producers bounced on sign coal demand in China are recovering.

The Hang Seng Index surged 310.69 points, or 1.53%, to 20,629.31, while the Hang Seng China Enterprise added 218.6 points, or 1.86%, to 11,979.15.

In Australia, the shares market surged, following a positive close of Wall Street Friday and news that developed nations will keep government stimulus in place for a while longer. Banks and financials and properties shares were in favour on improved prospects for the global economy, while Sigma Pharmaceuticals acquisition plan and fund raising boosted up healthcare sector. Materials and resources shares were firmer, supported by Rio Tinto and Gold miners showed strength as the price of the metal staying around the $1000 mark.

At the closing bell, the benchmark S&P/ASX200 index rose 18.9 points, or 0.43%, to 4,454.4, meanwhile the broader All Ordinaries gained 18.4 points, or 0.41%, to 4,461.4.

On the economic front, the Australian Industry Group-Housing Industry Association said that Australia’s Performance of Construction Index rose 2.9 points to stand at 42.4 in August compared to the 39.5 reading in July. A reading below 50 means the construction sector is still in contraction.

ANZ’s monthly read on job ads saw advertised jobs increase in August, the first gain since April 2008. Total job ads grew 4.1% in August from July to average 130k ads per week.

In New Zealand, stock market commenced the first trading day of the week in the green region trailing pessimism on the Wall Street on Friday. The share market registered the third consecutive session in the positive terrain on Monday. Asian stock markets were mostly higher taking their cues from a positive close in the United States market as data revealed fewer job cuts in August.

The NZX50 gained 0.69% or 24.37 points to 3122.69. The NZX 15 increased 0.91% or 60.87 points to close at 5765.93.

On the economic front, New Zealand’s seasonally adjusted total wholesale trade sales fell 0.9 percent ($195 million) for the June 2009 quarter, registering the fourth consecutive quarter decline as per the statistical department. This follows the record decrease of 5.8 percent ($1.3 billion) in the March 2009 quarter and is the first time since the current series began in March 1995 that total sales have fallen for four consecutive quarters. The total sales trend has fallen 10.4 percent since the June 2008 quarter. Seasonally adjusted wholesale stocks for the June 2009 quarter fell 4.6 percent ($506 million).

In South Korea, shares finished 0.02% lower as institutional sell-offs outweighed thin buying from retail and foreign investors. After a day of choppy trading, the benchmark Korean Composite Stock Price Index (KOSPI) inched down 0.33 points to 1,608.57.

In Singapore, stock market surged, after fluctuating in and out of boundary, buoyed up by buybacks in major blue chip and properties shares spurred by positive Wall Street close on Friday due to the slowing pace of US job losses. Shares of Palm oil suppliers plunged after crude palm oil for November delivery dropped 7.3% in Kuala Lumpur last week. China related stocks were firmer on hopes that Beijing will continue to use policy to support asset prices. The blue chip Straits Times Index advanced 21.26 points or 0.81%, to 2,643.95.

In Taiwan, stock market stretched its success for the seventh session, hovering at a more than one-year closing high, with contract chipmakers leading gains on the prospect of increasing orders.

The benchmark Taiex share index stretched its winning streak in seventh session as its finished the session higher by 71.46 points or 1.00% in a day, closing the day at 7224.59, highest closing since 14 August 2008 when market closed at 7326.07.

In India, strong response to the initial public offer of Oil India, an improvement in business confidence of India Inc and revival of monsoon rains bolstered bulls as the barometer index BSE Sensex surged past the psychological 16,000 mark.

The BSE 30-share Sensex was up 327.20 points or 2.09% to 16,016.32. The Sensex opened 104.15 points higher at 15,793.27, also its day's low. The barometer index gained 346.38 points at the day's high of 16,035.50 in late trade, its highest level since 2 June 2008

The S&P CNX Nifty rose 102.50 points or 2.19% to 4,782.90. The index struck an intra-day high of 4790, its highest level since 2 June 2008.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.99% or 11.65 points to 1190.39 while stock markets in Indonesia’s Jakarta Composite index ended the day lower at 2340.39.

In other regional market, European shares gained sharply on Monday, with food producers leading the way after Kraft Foods made an unsolicited bid for Cadbury, igniting hopes for a revival of mergers-and-acquisitions activity. On a regional level, the U.K. FTSE 100 index rose 1.5% to 4,922.86, the German DAX index rose 1.5% to 5,464.11 and the French CAC-40 index rose 1.5% to 3,651.79.